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Aerial view of Lupin offices, Baltimore, US
LUPIN LIMITED
FY 2017 Investor Presentation
May 24, 2017
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MARKET LEADERSHIP
01
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Lupin is a Dominant Force in Global Generics
4th
largest generic globally (by market cap1)
2nd
largest Indian Pharma Co (by global sales2)
6th
largest generic company(by sales2)
Globally
#1in Anti-TB(globally)
6th
India Pharma Market Rank5
4th
largest South Africa generics6
Emerging Markets
5th
largest US(by prescriptions3)
6th
Largest Japanese Gx4
Advanced Markets
Sources:1. Bloomberg EQS, 31 Mar 20172. LTM sales available as of 31 Dec 20163. QuintilesIMS MAT Feb 17
4. QuintilesIMS Data Japan (As of March 2017) at NHI price basis5. QuintilesIMS MAT Mar 176. QuintilesIMS MAT Mar 17
USD2.55bnGlobal Revenues
3
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A Decade of Stellar Financial Performance
FY07 FY17(INR bn)
Revenues
R&D spend
EBITDA
8.5x
9.6x
16.3x
20 171
27%margin
465
13.5%Of sales
231.47%Of sales
24%margin
Enhanced profitability despite significant step-up in R&D investments
4
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• Forbes Global 2000, FY 2016
• Forbes India “Super 50”, FY 2016
• Lupin in AON Best Employers India 2016
• Thomson Reuters India Innovation Awards for R&D, FY 2015 - 16
• The Golden Peacock Award for Excellence in Corporate Governance, FY 2016
• Ranked 15th in the Great Places to Work “Best Companies to Work for in Asia”
• Forbes India Business Leadership Awards 2016 – Vinita Gupta & Nilesh Gupta
awarded the Entrepreneur of the Year
• Vinita Gupta: “Outstanding Woman Business Leader” – CNBC-IBLA: FY 2016
• Vinita Gupta: Forbes Asia Power Businesswomen, “Power 50”, FY 2016
• Vinita Gupta: Hall of Fame - The Most Powerful Business Women 2016 by
Business Today
• Ramesh Swaminathan: Best CFO - Best Inorganic Growth Strategy, 2017 by
BusinessWorld Best CFO Awards
`
Lupin – Awards and Accolades
5
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WHAT ARE THE
MARKET DYNAMICS?
02
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Evolving Dynamics in Global Pharma Market
Markets
• Innovation led growth in Developed markets
• Emerging markets growth driven by volume
Generics
• Pricing Pressure and customer consolidation
• Increasing competition
• Shift to complex generics
Specialty
• Generics focusing to build specialty / branded business
• Focus on niche areas with small prescriber population
Biosimilars
• Mixed success in EU and US -varied by type of biologic
• US biosimilars pathway evolving
Regulatory
• Faster approvals in US – an opportunity and a challenge
• Compliance challenges increasing
7
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Global Generics Growth Prospects
Generics growth is slowing across markets
Expected to grow at mid single digits CAGR till 20211
• LOE of $80 bn over the
next 5 years
• Complex generics and
branded generics likely to
aid growth
• Pricing pressure persists
• Increased pace of
approvals by FDA
US Generics Market
• Government continues to
push generics to increase
penetration
• Incentivizing channel to
promote generics and
penalizing low usage
• Price cuts: Proposed
annual from current
biennial system
Japan Generics Market
Expected to grow faster than other EMs1
India Pharma Market
12%
7%8%
7%8%
Next 5 yrs CAGR for emerging markets
India ChinaBrazil RussiaOther emerging
• India expected to enter
Top 10 pharma markets by
2021
Expected to grow at 7% CAGR till 20212
Source:1. QuintilesIMS Health Use of Medicines 2021 2. Citi Japan Research Notes
8
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Our Strategic Direction
2016
• Primarily a Generic / Branded Generic Business
• 3 strong geographies
2017-2020
• Leading generics player with a larger complex generics mix
• Building Specialty business
• Stronger geographic spread
2020+
• Leading generics player with a significant complex generics mix
• Material Specialty business
• Leading Global player
9
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FY17 PERFORMANCE
03
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Goa EIRReceived from USFDA
FY17 Milestones
Organic Highlights
Inorganic Highlights
JAN-17APR-16 JUL-16 OCT-16 MAR-17
Launched MethergineWomen’s Health Specialty in the US
Acquisition of 21 Brands from Shionogi in Japan
Partnered with Monosol Rxto develop Paediatric ADHD products
Boehringer Ingelheim Agreement to market Type II diabetes drug (empaglifozin) in India
License from Eli Lilly for rapid acting insulin analog (Eglucent) in India
Launched Gx Minastrin 24 Fe with 180 day exclusivity
Japan: Exclusive in-licensing agreement with Astellas for marketing their Quetiapine fumarate extended release tablets
LRP Pune Added New Building Somerset, NJ
New block commissioned
Albuterol MDI ANDA filing
Sikkim New plant commissioned
Tottori, Japan New plant commissioned
11
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Outpaced Peers in FY171
Lupin has outpaced local as well as global generic peers in terms of performance
Source:1. Used actuals for reported and Bloomberg consensus estimates for unreported
24.4%
8.7% 8.1%
18.8%
6.7%
10.0%
0%
5%
10%
15%
20%
25%
30%
Lupin Indian Peers Global Gx Peers
Sales Growth EBITDA Growth
12
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P&L Highlights – FY17
Particulars (INRmn) FY2017% of net
sales FY2016% of net
sales YoY growth
Net sales 171,198 100.0% 137,579 100.0% 24.4%
Other operating income 3,745 4,976
Total revenue 174,943 142,555 22.7%
Gross margin(excl. other operating income)
121,184 70.8% 94,253 68.5% 28.6%
EBITDA 45,997 26.9% 38,705 28.1% 18.8%
EBIT 36,875 21.5% 33,834 24.6% 9.0%
Net profit 25,575 14.9% 22,607 16.4% 13.1%
13
FY17 EBITDA includes the impact of:• Provision made for liability towards its Australian subsidiary with respected to Isabelle• Net Impact of foreign exchange fluctuation
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P&L Highlights – Q4FY17
Particulars (INRmn) Q4FY17% of net
sales Q4FY16% of net
salesYoY
growth Q3FY17% of net
salesQoQ
growth
Net sales 41,619 100.0% 41,090 100.0% 1.3% 44,049 100.0% (5.5%)
Other operating income 914 884 780
Total revenue 42,533 41,974 1.3% 44,829 (5.1%)
Gross margin(excl. other operating income)
29,768 71.5% 30,080 73.2% (1.0%) 31,033 70.5% (4.1%)
EBITDA 8,267 19.9% 13,497 32.8% (38.7%) 13,219 30.0% (37.5%)
EBIT 5,593 13.4% 12,009 29.2% (53.4%) 10,910 24.8% (48.7%)
Net profit 3,802 9.1% 7,479 18.2% (49.2%) 6,331 14.4% (39.9%)
14
Q4 FY17 EBITDA includes the impact of:• Provision made for liability towards its Australian subsidiary with respected to Isabelle• Net Impact of foreign exchange fluctuation
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EBITDA Margin Bridge
28.1%26.9%
0.9% 1.3%1.8% 2.3% 0.6%
FY2016 Isabelle Forex R&D Gross Margins Others FY2017
30.0%
19.9%
3.7%2.5%
5.7%1.4% 0.5%
Q3 FY2017 Isabelle R&D Forex Others Manpower Q4 FY2017
32.8%
19.9%
3.7%2.6%
4.7%
3.2%1.1%
Q4 FY2016 Isabelle R&D Forex Manpower OtherExpenses
Q4 FY2017
FY 17 vs FY 16
Q4 FY 16 vs Q4 FY 17Q3 FY 17 vs Q4 FY 2017
15
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21,901
19,007
Q4'16 Q4'17
(IN
Rm
n)
North America
• US business crossed $ 1 bn mark in FY17,
registering 37% growth ($1,207 mn)
- Brands grew by 90% to $78 mn
• Accelerated approvals (34) throughout
FY17
• 18 product launches in FY17 with 11 in
Q4FY17
• US Market Share: No. 1 in 45 & top 3 in
83 products1
• 154 pending ANDAs targeting $76 bn
brand size
Note:1 IMS MAT Mar-17
16
59,249
82,627
FY16 FY17
(IN
Rm
n)
21,755
19,007
Q3'17 Q4'17
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9,9128,788
Q3'17 Q4'17
7,7228,788
Q4'16 Q4'17
(IN
Rm
n)
India
Note:1 IMS MAT Mar 17
• Moved up to 6th rank in the IPM1
• Total field force of 6,650+
• Launched 62 SKUs in FY17
• Therapy-wise split FY17:
- Chronic sales – 55.4%;
- Semi-chronic sales – 27.5%
- Acute – 17.1%
Sustained Market Share gain in chronic therapies during FY171
- Cardiac: Maintained 2nd rank
- Antidiabetics: Moved up to 4th rank
- Respiratory: Ranking moved up to 2nd
34,48638,157
FY16 FY17
(IN
Rm
n)
17
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17,70522,655
FY16 FY17
(IN
Rm
n)
5,601 6,118
Q3'17 Q4'17
APAC
Japan
• Japan sales grew by 15% to JPY 28,756 mn during FY17
• Strengthened CNS positioning with
- Shionogi brands acquisition in Dec-16
- In-licensing agreement to market Quetiapine Fumarate ER tablets
• 6th largest1 generic company
• Tottori site commissioned during the year
• Strategic partnership with a national distributor
• Philippines business grew by 23% to PHP 1,969 mn in FY17
• Ranked 4th branded Gx player2
• Growth of 32.3%2 against industry growth of 6.7%2
Note:1 IMS Data Japan (April 2016 – March 2017) at NHI price 2 Philippines IMS MAT Mar 17
4,532
6,118
Q4'16 Q4'17
(IN
Rm
n)
Philippines
Japan
18
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2,555 3,012
Q3'17 Q4'17
EMEA
Note:1 SA IMS MAT Mar 17
• South Africa business grew by 21% to ZAR
1,012 mn in FY17
• 4th largest generic company1 & #1 CVS
player1
South Africa
• Focus on Germany: Business grew by 24%
in EUR
• EU 5 markets: Focus on neuro specialty
products (viz. Temmler)
• Expanding EU Partnered Business
Europe
19
8,676
10,115
FY16 FY17
(IN
Rm
n)
2,4523,012
Q4'16 Q4'17
(IN
Rm
n)
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3,5074,519
FY16 FY17
(IN
Rm
n)
924
1,269
Q4'16 Q4'17
(IN
Rm
n)
1,175 1,269
Q3'17 Q4'17
Note:1 Mexico IMS Knobloch Mar 17 MAT2 Brazil IMS MAT Mar 17
• Mexico business grew by 5% in MXN
530 mn in FY17
• IMS growth of 12.8%1
• Launched Omnicef brand under
license from Astellas
LatAm
• Brazil business grew by 53% to BRL
126 mn in FY17
• IMS growth of 29% vs market
growth of 14%2
Brazil
Mexico
20
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12,469 11,383
FY16 FY17
(IN
Rm
n)
2,684 2,815
Q3'17 Q4'17
(IN
Rm
n)
API
• Enhanced focus on pipeline of complex
and first-to-file APIs
• Significant new product portfolio
expansion to cater to US/EU/Japan
markets
• Foray into Oncology APIs
• 15 US DMFs filed during the year taking
cumulative filings to 187 (March 2017)
2,953 2,815
Q4'16 Q4'17
(IN
Rm
n)
21
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THE ROAD AHEAD
04
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Uniquely positioned to become a leading Global Pharma
Leading Global
Pharma Player
Building R&D Capabilities
Operating / Manufacturing
Efficiencies
Staying Ahead of Compliance
CurveAcquisitions
and In-licensing
Specialty Efforts
13.5%of Sales
R&D Spend
>20,000Global Workforce
Lupin has maintained an impeccable quality and compliance record
18Manufacturing
Sites9
Acquisitions in last 10 years
23
Focus on Women’s Health,
CNS,Paediatrics
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Manufacturing & R&D– A Diverse Global Network
18Manufacturing Sites
• 8 USFDA approved sites• 5 USFDA inspections in FY17• Various audits conducted by
other authorities without critical observations
9R&D Sites
• 368 US ANDA filings• 45 US First to Files• 2,837 patents filed globally• 1,700+ scientists at Global
locations
24
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Our Investments for the Future
154 ANDA pending filings with record 37 filings and 34 approvals in FY17
– Pending filings target market size of $76bn
– 28 pending FTFs targeting market size of $12.4 bn
Enhanced investment on inhalation, biosimilars and injectables
7.1 9.3 11.016.0
23.17.5% 8.4% 8.7%
11.7%13.5%
0.0%
5.0%
10.0%
15.0%
20.0%
0
5
10
15
20
25
FY13 FY14 FY15 FY16 FY17
(IN
R b
n)
R&D Spend
R&D Expense % of Sales
24
6
25
79
117
3 24
9
Q1'17 Q2'17 Q3'17 Q4'17
US Gx Progression in FY17
Filings Approvals Launches
25
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Lupin has the 4th largest ANDA pipeline*
Despite record approvals by FDA and heightened consolidation in the sector, Lupin holds the 4th largest USFDA ANDA pipeline
* Source: Teva 6K 1Q 2017 (As of 31-Mar-17); Mylan 13-Mar-17 PR; Cadila Investor presentation March 2017; Sun 3Q 2017 Earnings Call (As of 31-Dec-16); Fresenius investor presentation for Akorn acquisition (April 24, 2017); Amneal PR April 22, 2017; Endo Company website (Annual Report 2016); Aurobindo Q3 2017 Investor Presentation (31-Dec-16); DR Reddy’s 4Q 2017 Investor presentation (31-Mar-17); Hikma Investor presentation 03/15/17 (injectables and non-injectables pipeline); Cipla 3Q 2017 Earnings Call (As of 31-Dec-16); Glenmark PR April 19, 2017
248240
198
154 149140
125 120 118101
70 65 65
Teva Mylan Cadila Lupin Sun Fresenius+ Akorn
Amneal Endo Aurobindo DRL Hikma Glenmark Cipla
USFDA Pending ANDA Pipeline
26
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Development Pipeline and Spend across Focus Areas
>400 products in pipeline targeting total US market of ~$200bn..
27
…with Investment across key R&D Focus Areas in FY17
Oral solids45%
Inhalation9%
Complex Generics3%
Injectable5%
Derma1%
API Development11%
IP7%
Biosimilars9%
NDDD10%
Oral Solids / Liquids59%
Inhalation8%
Controlled Substances
5%
Dermatology / Topicals
3%
Ophthalmics3%
Injectables5%
Depot Injectables2%
Biosimilars15%
Pipeline Market Size Split FY17 R&D Spend Split
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Evolving in Complex Generics and Specialty
28
ANDAs
Para IV filings
Complex generics
Biosimilars
Specialty (NDA)
• CNS franchise in Japan boosted by acquisition (Shionogi) & in-licensing (Quetiapine Fumarate ER)
• Product development for movement disorder in Germany
CNS
• US Women's health foray with Methergine launch
• Dedicated OB/GYNs fieldforce
Women’s Health
• Etanercept development on track
Biosimilars
• Filed first MDI (albuterol)• Tiotropium DPI development
on track
Inhalation
• Partnership with Monosol Rx
Paediatrics
• Microsieve emulsification technology
• Targeting first filing in FY19
Complex Injectables
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Success hinges on Continued Execution
Research
• Investments towards new capabilities
• High-barrier generics, biosimilars and Specialty
Manufacturing
• Build the right capacities in time
• Focus on Operational Efficiencies
• Truly global supply chain
Quality and Regulatory
• Maintain our impeccable compliance record
• Focus on timely approval of the right products
Inorganic
• Focus on Specialty areas in developed markets
• Continue in-licensing initiatives
Specialty
• Establish legitimacy and depth in areas of focus
• Women’s health, paediatric and CNS
29
Delivering on complex generic pipeline, our impeccable compliance record backed by strong execution will help sustain our growth momentum in the mid to long-term
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Thank You